Which of the Following Would Shift the Long-Run Aggregate Supply

question 164

Multiple Choice

Which of the following would shift the long-run aggregate supply curve to the right?

• A) a decrease in the rate of inflation
• B) the invention of a new computer chip that makes assembly production twice as fast
• C) a severe drought that decreases crop production and as a result raises prices
• D) an increase in the growth rate of spending

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Definitions:

Hurdle Rate

The minimum rate of return on an investment that a business requires before it will proceed with the project.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital where each category of capital is proportionately weighted.

Fixed Order Interval

A replenishment method where orders are placed at fixed intervals, ensuring a periodic review and stock refill.

EOQ Model

Economic Order Quantity Model, an inventory management tool used to determine the optimal order size that minimizes total inventory costs including holding and ordering costs.